Gov. Mike Beebe on His Fiscal Forecast for '15, What He'll Say to His Successor

by Arkansas Business Staff  on Monday, Dec. 23, 2013 12:00 am  

Gov. Mike Beebe (Photo by Russ Powell)

Mike Beebe was elected governor in 2006 after having served 20 years in the state Senate and a four-year term as state attorney general. Beebe won re-election to his second, and final, term in 2010. During his administration he has focused on education, economic development and tax reform.

Beebe, born in Amagon (Jackson County) in 1946, earned a bachelor’s degree in political science from Arkansas State University in Jonesboro in 1968. He completed law school at the University of Arkansas in 1972, while serving in the U.S. Army Reserve. He and his wife, Ginger, have three adult children.

Gov. Mike Beebe currently serves at the chairman of the Southern Governors’ Association.

There have been some indications that the state Legislature might not reauthorize the use of federal money to buy private health insurance for poor Arkansans, the “private option.” What will you do if that happens?

The passage of the private option was a tight vote, as was expected with the three-fourths supermajorities required in both houses of the General Assembly. To this point, we haven’t heard of any specific individuals planning to withdraw their support in February. Arkansas’ private option has become a model other states are examining and pursuing to potentially insure more of their lower-income citizens without using the traditional Medicaid model.

If the private option is not reauthorized, there are two significant consequences. First, you will be taking health insurance away from what will, by then, likely be in excess of 100,000 Arkansans, just six months after they have begun to receive it. It will also leave a sizable hole in the state budget, as savings in general revenue generated by the influx of federal funds have already been dedicated to pay for tax cuts in fiscal year 2015.

You have overseen the elimination of most of the grocery sales tax in Arkansas. Do you plan to ask legislators to further cut it or to completely eliminate the tax?

The General Assembly passed a bill this year that will eliminate as much of the sales tax on groceries as is allowed without a vote of the people. Under this new law, whenever the state is no longer making payments related to the school desegregation settlement, the first call on that money will be further reducing the sales tax on groceries. We’ve already reduced it from 6 percent to 1.5 percent. There is one-eighth of a percent that was enacted as a conservation tax by the voters that will still remain after the grocery tax is reduced further.

What’s your revenue and tax collection forecast for fiscal 2015?

Our forecast remains conservative but does include slow growth in the next fiscal year. I always instruct our Department of Finance & Administration to be conservative in its calculations, because you never know what financial circumstances will arise. As a case in point, we’ve recently made a small downward adjustment to our forecast for the current fiscal year as a result of the fallout from the federal government’s most recent shutdown.

How close are you to finalizing your fiscal 2015 budget and what can you reveal about it?

I am close to finalizing my proposed budget but am not ready to discuss specifics. It will include a continued increase in funding for public education, and additional money for our Department of Correction as we continue to adjust our parole system and keep more parole violators behind bars. The DF&A will present the budget to the General Assembly in January.

The federal minimum wage is now $7.25 an hour, which is about $15,000 annually. Arkansas’ minimum wage is lower, $6.25 an hour. Do you support raising either the federal or state minimum wage? If so, what should it be?

This issue came up during the 2011 legislative session. I said then that while we want as many of our citizens as possible to earn a good wage for the work they do, our economic recovery was too fragile at that time to adjust the minimum wage. While our economy is stronger now, I won’t be in office to re-examine the issue when the next opportunity to do so arrives in 2015. It will be up to the next administration and General Assembly to assess our economic standing and go from there. The voters may have a say first if the currently proposed initiative makes the 2014 ballot. I do believe the proposed incremental approach is wiser than trying to make one bulk adjustment.

What are the top two or three economic development projects that the state has landed during your administration of which you’re proudest?

I don’t want to name two or three specific projects, because there are many to be proud of, and I don’t want to appear to play any favorites. I will say, however, that I am very proud of how well we’ve been able to attract both manufacturing and technology jobs during the past seven years. Manufacturing jobs are increasingly coming back to the United States, and Arkansas is proving to be a good destination for them. Technology jobs are a major driver of the national economy, and we are both attracting and creating businesses centered on scientific advances.

You’re a pretty popular Democrat, as elected officials and Democrats go. And you’ve stated that you don’t plan to seek another public office once your term as governor is complete, at the end of next year. However, a couple of popular Democrats — James Lee Witt and Pat Hays — have come out of retirement to run for office. Might you also reconsider?

Thank you, but I have no intention of holding public office again after leaving here in January of 2015. Being governor is the best job I’ve ever had, and I don’t plan to run for any other elected position.

We often ask business and political leaders to detail their biggest career mistake. It’s hard for some — few people want to reveal “weakness” — but it’s also revealing. Most of us learn much more from our mistakes than our successes. What was your biggest career mistake?

It’s hard for me to pick a biggest mistake without the perspective of history, just as it would be hard for me to pick a biggest accomplishment without that same perspective. I’ve made plenty of mistakes during my 30-plus years in office, and only time will tell if one stands above the others. In general, I think the biggest mistake you can make is repeating missteps you’ve made before.

On the day that gubernatorial power passes into your successor’s hands, whoever that might be, what words of advice will you whisper to him or her?

I won’t need to whisper it, because it’s not a secret: Surround yourself with good, thoughtful, competent people. Whether it’s your office staff or your agency directors, you need to be confident that these people can do their jobs well and will speak up when they respectfully disagree with you. I’ve always had a sign in my office that says, “I don’t have stress, but I am a carrier.” While being governor brings a lot of stress with the job, having the right people around you makes it easier to handle, and many times, even fun. It’s another reason why this is the best job I’ve ever had.

 

 

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